Saturday, December 03, 2005

I've been purposely sitting on what I've known about the arena management contract that was awarded last month to the Philadelphia based firm, SMG.

I've known that there were some serious irregularities in the bid process that Bill LaFortune's hand-picked Vision 2025 Oversight Committee used to select the company that will run our huge investment in both the Civic Center and the new arena. This committee, (known originally around City Hall as the Super Six until it grew to twelve members) was supposed to review the sealed bids submitted by the three applicants and then weight the bids on various criteria. The result of the final "weighting," was supposed to...in theory...result in the best applicant for the arena management contract.

I'll get into some of the weaknesses of the process...and the logic of the people involved in the process...later. Right now, before I've bored you to death...let's deal with the 900 pound gorilla in the room. Or, more rightly, the fourteen second pregnant pause that was in the Civic Center Executive Meeting Room at around 10:40 AM on Thursday, December 1st.

The two entities that lost in the bid process were the City of Tulsa's Civic Center management team and a private company called Global Spectrum (GS). The meeting last Thursday was held in order to hear the concerns of GS with regard to what they learned about how the bids were handled by LaFortune's team. In fact, they had earlier requested in a letter to the city's purchasing department, for details in how they might formally protest the decision. Since there is no way it might destroy any drama you might be feeling to tell you now how it ended, the committee very politely rejected GS's appeal.

It took the Tulsa World more than a week following their initial interview with the GS executives, to finally publish a very shallow story on the issue in their paper. Most interestingly, they made a prophet of me with the GS execs, because I told them that Tulsa's paper would either not publish any story critical of the process, or would bury it deep in the Local section on Thanksgiving Day. Guess what? They did publish the story. Did you see it before you stuffed the turkey and/or yourself?

In a November 28th letter addressed to Larry Hood, the Director of Purchasing for the City of Tulsa, Frank Russo, the Senior VP for Sales at Global Spectrum outlined most of their concerns. You can read the letter in it's entirety here. For brevity's sake, let me include the final paragraph to illustrate how unusual an act this protest was for Global Spectrum:

In conclusion we are very disappointed with the selection process. I have personally been competing for private management contracts since 1988 and I have never filed a protest, but this situation is different – it is not simply “sour grapes.” We can’t help but feel that we were simply used to create the appearance of competition. We remain baffled as to why the City seems to be acting against its own best interests.

Even so, GS accepted an invitation from the city to fly one of their execs (Dean Dennis, Global Spectrum Western Region VP for Sales) to fly at GS's expense to Tulsa, to ask questions of the "Super Twelve" about Global Spectrum's concerns. Please note, I said "ask questions." Apparently there was no guarantee that the loss of time and money would result in satisfactory answers. Actually, as it turned out, there was no guarantee of any answer at all!In a moment, I'm going to suggest you click on the link below to hear a 92 second sound clip that mocks any "spin" that members of the committee might have made to the local "news"paper. One such example of the spin came from District Nine Councilor Susan Neal. Here's what the World reported on Councilor Neal's thoughts on the rejection of GS's request to re-open the process:

City Councilor Susan Neal, one of the 15 committee members, said that to change the committee's decision, "it needed to hear some extraordinary evidence, and it didn't."

"The overall cost of operation, cost effectiveness, cost efficiency, savings to the taxpayers, best bang for the buck, best return on the investment for the longevity of the facility, all of that was considered in those numbers," she said.

"So, when you actually compare the two companies, their bids are so very close, but when you look at their returns, they are not close."

For those of you that pay to read the World online, you can read the entire story here. [Hurry...if you wait until after Friday, Dec. 8, you'll have to pay again.]

During the one hour that GS was allowed to makes its case and to ask questions, they attempted to address all five of the main points outlined in Russo's Nov. 28th letter to the City. However, GS VP Dean Dennis made multiple attempts to get someone...anyone...to answer item two on their list of concerns. Item two reads as follows [note; IFB stands for "Invitation For Bid"]:

2. Global Spectrum was the low bidder for the combined facilities by over $335,000. You can make all the adjustments you want – we were still the low bidder and yet SMG even received a higher score than us on this category!? We used your required IFB Form that leaves no doubt that we were the low bidder.

Those of you that dutifully read the Tulsa World account of the meeting will see no mention whatsoever of this concern on the part of Dennis and Global Spectrum's management. Those of you who know the Tulsa World has no objectivity on such issues are not surprised.

Rather than deal with the very real concerns of lack of logic in the process, the paper chose instead to focus on a letter of recommendation that Tulsa Vision Builder's arena project manager, Bart Boatright, sent to the committee supporting Global's rival, SMG. They used a quote from me to make it appear that this was the main sticking point and that even that contentious Medlock guy said nothing was wrong. At least, for once, they didn't refer to me as "Chris Medlock, who is running for mayor." Here's the actual quote from the paper:

City Councilor Chris Medlock, who attended the protest hearing, said he thinks Boatright had a lapse in judgment as far as the letter but blamed the administration for putting Boatright in an "impossible position."

Who else was in the room? Among others, there was Charles Hardt (CoT Director of Public Works), Mike Buchert (Asst. Dir. of Public Works), Clay Bird (Mayor's Chief of Staff), Susan Neal (Dist. 9 City Councilor), Bart Boatright (Tulsa Vision Builders Project Manager and the guy Clay Bird told the Council in committee two weeks earlier "had all the answers"), Larry Hood (Dir. of Purchasing), Linda Redemann (Asst. City Attorney, who along with Boatright and Hood wrote the IFB), Charles Norman (former City Attorney and the Mayor's fomer boss), and Karen Keith (the Mayor's chief spin doctor). Pretty safe to say, that any question regarding the arena, or the bidding process, should reside in one of these folks' brain, right?

Guess again.

So that brings us to the audio. What P.J. Lassek probably should have written was, Chris Medlock, who attended the protest hearing with a digital recorder that had enough memory to get Global's concerns recorded..."

What you will hear is a 92 second segment of the discussion. The first voice you will hear is that of Global's Dean Dennis, who is pointing to pro forma figures in a section of their bid and comparing it to the equivalent section in SMG's bid. He mentions "synergy savings," which is a term that appeared in SMG's bid, but was not part of the IFB requirements, but was used to explain much of why SMG won the bid.

The first question he asks is to simply ask if his interpretation of the figures is "correct?" Rather than getting confirmation to his logic, Larry Hood reads the two dollar figures in thousands of dollars, confirming that Global was slightly lower in its bid. Remember this, because it is important.

Then Dennis states his hope that the committee wasn't confused by the different ways that the two companies used to state their financial projections (pro formas). If there was confusion, it is possible that they weren't comparing "apples to apples," so to speak.

But then, in a very polite way, Dennis asks the quesiton Global most wants answered. If they were the low bidder on the compensation portion of the bids, why then, did SMG get more points for that section from the appointed members of the committee, with regard to the commitee's weighted scoring? In other words, Global won that section of the bid, and should have been awarded the higher score, right?

In fact, it was learned later in the meeting that Global's score in this section was the second best out of the three, and that SMG's was third out of three. The lowest bid on compensation was the City of Tulsa's Civic Center Management team. So here's how they ranked in bidding from lowest (best) to highest (worst):

1. Civic Center Management2. Global Spectrum3. SMG

But how did the committee weigh this section? Here's how:

1. SMG2. Global Spectrum3. Civic Center Management

Get the feeling something is going on here? Am I getting another notion that needs to be "quashed?"

So Dean Dennis asks the BIG question, and what is his answer? LISTEN HERE.

For those of you that couldn't download the file, he was answered with exactly fourteen seconds of dead silence, broken only by the voice of Asst. Director of Public Works, Mike Buchert, asking "Does anyone else have any questions or comments?"

Note to Mr. Buchert: What Mr. Dennis was looking for was neither a question, nor a comment. What Mr. Dennis, who flew to Tulsa at his company's expense was looking for was an answer, even if it proved a point that would be mightily embarrassing to the committee and the administration.

Mr. Dennis deserved an answer. He had left his wife (who is, by the way, the Secretary of State for the State of Colorado) and family to get an answer. Global Spectrum deserved an answer. The people of Tulsa deserved an answer. So where was the answer?

I'm guessing you don't have an answer. But don't think it's the last time you're going to be asked.